A gloomy global outlook, tensions with Pakistan and bad weather at home are unlikely to dent Indian growth, Finance Minister Jaswant Singh has said.

Mr Singh has retained his 5.0-5.5% growth forecast for the year to March 2003, but warned that the Indian economy faced a range of "imponderables".

Chief among these was the impact of a war on Iraq, especially in light of India's dependence on imported oil.

The forecast was contained in the finance ministry's mid-year review, an innovation intended to shed more light on economic policy making and to prepare for next year's Budget.

'Intrinsic strength'

The mid-year report adopted a broadly positive tone.

Mr Singh is keen on greater transparency

"The Indian economy... has once again demonstrated its intrinsic strength, despite the drag of the most telling monsoon deficiency in two decades, a subdued world economic outlook accompanied by sluggish global trade, and unsettling geo-political conditions," it said.

But it warned that there was much that India could do to improve its situation.

First, interest rate policy should be revised in order to encourage saving and help reconstruct the ramshackle pension industry.

Second, it urged the government to pour more effort into attracting foreign investment, an area where India has long lagged other large economies.

Good practice

The real importance of the report, analysts argued, was its very existence.

The Indian government has tended to be somewhat secretive about economic policy, and public knowledge of and interest in it is limited.

"There is no surprise element as almost everything is known," said Saumitra Chaudhuri, economic adviser with Indian credit rating agency ICRA.